DALLAS (CN) - A Denton man was sentenced to 17½ years in federal prison for running an $18 million oil and gas Ponzi scheme - and gambling away more than $5 million of investors' money at casinos. Michael Eugene Dannelly, 50, pleaded guilty in August 2009 to one count of mail fraud.
Dannelly defrauded investors by selling them bogus oil and gas securities, U.S. Attorney John M. Bales said.
Dannelly owned and operated Oil & Gas Managing Partners and VADC Inc., which claimed to be raising money to drill in Texas and Oklahoma.
"Directly and through his employees, Dannelly made false representations to over 250 victims in order to obtain almost $18 million, most of which was used for personal expenditures, including $5.3 million in gambling expenses at the Eldorado and Horseshoe Casinos in Shreveport, Louisiana," prosecutors said.
"Dannelly also fraudulently obtained $250,000 from a financial institution in connection with this scheme."
Dannelly also was ordered to pay $17.7 million in restitution.
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